Prolight Diagnostics: SEK 17m UK grant a welcome external validation - Emergers

Prolight’s report for Q1’24 did not reveal any particular surprises. The positive SEK 5.6m revision to the FY’23 result stemming from an understated claim on the UK tax authority and the SEK 113m write down of capitalized development had already been communicated. The Q1 report did however coincide with the announcement that Prolight has been awarded a SEK 17m NIHR Innovation grant from the UK government, which will be used to fund a trial to pre-validate assay and prototype performance, with initial data in Q3’24 and results expected in Q4’24. With the exercise price for TO6 set at SEK 0.10 per share, we expect that Prolight will raise another SEK 22m before costs during May, bringing net cash to a healthy SEK 70m. With proof-of-performance for its proprietary digital technique for detection of high-sensitive biomarkers even in whole blood, we now expect the company to continue it’s progress with prototype development, pre-validation trial and IVDR certification towards launch in 2026. This in turn should catalyze a revaluation that better reflects the long term prospects we’re seeing, where we continue to find support for a fair value of SEK 1.1 – 1.2 per share.